Schools should sell more services to each other in an effort to improve standards, a think-tank has recommended.
E-commerce could boost schools' 'independence'
The Institute for Policy Research (IPPR) said institutions could liberate themselves from central government control by trading in items such as software, online lesson plans and courses.
Several schools have already made hundreds of thousands of pounds from selling services.
IPPR's assistant director of education, Joe Hallgarten, said: "The economy of the education world is like a leaky bucket.
'Oiling the wheels'
"Money flows in and out with little being retained. If just a small amount of the additional resources promised by government was recycled around schools, it would make a significant difference to education funding.
"Commercial relationships should support sustainable school improvement."
One of the schools praised by IPPR is Varndean in Brighton, East Sussex, which sells software and after-sales support to schools and colleges.
Established on the premises in 2001 by ex-staff, the business profit-shares with the school.
It grossed a £400,000 profit in its first year of trading and gives software free to other schools in the area.
Elsewhere, Ash Green Junior School in Halifax has generated more than £100,000 through the provision of computer courses.
And Thomas Telford City Technology College in Shropshire has been developing information and communication technology GCSE and GNVQ courses for the last five years.
These are now used by 50 schools, with profits estimated at £4m.
Mr Hallgarten said: "We have nothing to fear from the school-to-school market.
"It could enable bottom-up innovation and the sharing of best practice among schools, oiling the wheels of collaboration.
"Schools already engaged as service providers tend to reinvest profits into other school activities. This is money that can set schools free."
The IPPR recommends that government plays only a minor role in encouraging inter-school commerce, as it might otherwise damage "autonomy".
Several schools have established separate trading arms under the provisions.
The 2002 Education Act has extended legislation to enable groups of schools to form a single company.
Mr Hallgarten said: "Education policy and practice is entering a fascinating stage of development where, buoyed by ten years of real improvements and successes.
"The emergence of schools as service deliverers could play a key role in this process."